acidman and samir, the question is not what PE of trailing earnings are but what are the future earnings looking like, and what does the market look like. Right now, Zack is forecasting $.39 for next year (down from $.60). If we are still in a bear market for the segment or even the market in general, then a PE of 10 on these future earnings would be quite "standard". If we have turned the corner and we are going into a bull market for the segment, then both the earnings forecasts can be expected to increase back to the $.6 level and the PE could go up to 30 or more. Technically, the 14/15 area is presenting the expected resistance, but if it breaks through it, I would really start to worry about a short position in this stock.
Short term, I believe that the rally in the semi equip is exhausted, but I do not see us going to the lows set earlier, and after the elections I would not be surprised if the rally resumed, albeit more moderately then the recent two weeks. Thus, if CYMI retreats back to the low teens (10/11) in your shoes, I would cover those shorts.
Zeev |
